Correlation Between LIFENET INSURANCE and Yanzhou Coal
Can any of the company-specific risk be diversified away by investing in both LIFENET INSURANCE and Yanzhou Coal at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining LIFENET INSURANCE and Yanzhou Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIFENET INSURANCE CO and Yanzhou Coal Mining, you can compare the effects of market volatilities on LIFENET INSURANCE and Yanzhou Coal and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in LIFENET INSURANCE with a short position of Yanzhou Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFENET INSURANCE and Yanzhou Coal.
Diversification Opportunities for LIFENET INSURANCE and Yanzhou Coal
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LIFENET and Yanzhou is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding LIFENET INSURANCE CO and Yanzhou Coal Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yanzhou Coal Mining and LIFENET INSURANCE is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on LIFENET INSURANCE CO are associated (or correlated) with Yanzhou Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yanzhou Coal Mining has no effect on the direction of LIFENET INSURANCE i.e., LIFENET INSURANCE and Yanzhou Coal go up and down completely randomly.
Pair Corralation between LIFENET INSURANCE and Yanzhou Coal
Assuming the 90 days horizon LIFENET INSURANCE CO is expected to generate 0.66 times more return on investment than Yanzhou Coal. However, LIFENET INSURANCE CO is 1.51 times less risky than Yanzhou Coal. It trades about 0.08 of its potential returns per unit of risk. Yanzhou Coal Mining is currently generating about 0.01 per unit of risk. If you would invest 1,010 in LIFENET INSURANCE CO on September 26, 2024 and sell it today you would earn a total of 110.00 from holding LIFENET INSURANCE CO or generate 10.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
LIFENET INSURANCE CO vs. Yanzhou Coal Mining
Performance |
Timeline |
LIFENET INSURANCE |
Yanzhou Coal Mining |
LIFENET INSURANCE and Yanzhou Coal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with LIFENET INSURANCE and Yanzhou Coal
The main advantage of trading using opposite LIFENET INSURANCE and Yanzhou Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIFENET INSURANCE position performs unexpectedly, Yanzhou Coal can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Yanzhou Coal will offset losses from the drop in Yanzhou Coal's long position.LIFENET INSURANCE vs. Prudential plc | LIFENET INSURANCE vs. Wstenrot Wrttembergische AG | LIFENET INSURANCE vs. Northern Trust | LIFENET INSURANCE vs. ADRIATIC METALS LS 013355 |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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